For a city that already faces financial ruin, its newly passed ‘wealth tax’ could not have come at a worse time.
"Media coverage of San Francisco’s recent passage of a citywide “wealth tax” has been hard to come by, to say the least. One can be forgiven for wondering if leftist media outlets even see the writing on the city’s wall. It is not just that this bill will do little to provide additional net revenue to a city facing financial ruin; it is that this bill will surely do the exact opposite. Even critics of modern income inequality see policy prescriptions such as this as counterproductive. Indeed, in the present COVID-19 moment, San Francisco needs all the help it can get to attract businesses and well-paid taxpayers. This couldn’t come at a worse time.
"So, what is this new tax? Supporters call it the “overpaid executive tax.” (Kudos to them for framing so bluntly.) Technically, the citywide tax will operate as a levy of at least 0.1 percent on companies that pay their CEO more than 100 times the median pay of their workforce. That 0.1 percent tax can reach as high as 0.6 percent depending on how far above the company’s median pay the CEO’s total compensation is. Embedded in the name attached to this new legislation is the belief that disinterested third parties should determine fair and appropriate pay. Whether that be city bureaucrats or voters unconnected to the company in question, the notion that such actors should serve as the arbiters of proper pay levels is nothing more than a form of price-and-wage control. An easy retort to my concern here may be, “Why care about a mere 0.1 percent hit?”
"Well, if what we are seeking to address is really egregious, unfair, socially contemptible income inequality — robber-baron stuff — why should we stop at 0.1 percent? . . ."
DAVID L. BAHNSEN runs a private-wealth-management firm and is a National Review Institute trustee. @davidbahnsen
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